An Ingredient Brand is exactly what the name implies: an ingredient or component of a product that has its own brand identity. This is the first comprehensive book that explains how Ingredient Branding works and how brand managers can successfully improve the performance of component marketing!
The authors have examined more than one hundred examples, analyzed four industries and developed nine detailed case studies to demonstrate the viability of this marketing innovation. The new concepts and principles can easily be applied by professionals. In the light of the success stories of Intel, Gore-Tex, Dolby, Tetra Pak, Shimano, and Teflon it can be expected that component suppliers will increasingly use Ingredient Branding strategies in the future!
Ingredient Branding provides advantages for both component manufacturers as well as OEMs, the manufacturers of finished goods. Numerous suppliers have tried to implement their own Ingredient Branding marketing concepts, modeled on the Intel case, in order to escape the anonymity and substitutability of supplying a part or component. Since the advent of Ingredient Branding, more and more companies have discovered the advantages it has to offer.
The scale and speed of change in the global economy have combined to force industrial businesses to use more proactive marketing measures and to implement focused brand strategies. This enables them to be faster and more flexible in response to the changing competitive conditions, and to both suppliers’ and customers’ constantly changing needs. Still, many companies are at a loss when it comes to the topic of Ingredient Branding, and fail to make use of it in marketing their products.
Small and medium-sized businesses should not miss the chance to differentiate and market themselves internally as well as externally with a consistent and coherent brand. This way, they don’t only offer customer orientation, but they also gain a competitive advantage. It is also easier for small and medium-sized companies to profit from Branding because their decision process is shorter and easier than that of large companies. Additionally, small and medium-sized companies are more aware of their unique strengths and weaknesses. With the current changes in the relationship and structure of the supplier pyramid, the need for brand management will become far more apparent.
Ingredient Branding can create consumer demand (pull effect). When a company can demonstrate the superior performance of an ingredient or component in the final product, the customer is more likely to request the ingredient or component in their potential purchase of the product.
Comments on the book
„Having worked on the Bitrex Bitterant brand for nearly 25 years I was really pleased and proud of the recognition of our branding work as analyzed in your recent book. Bitrex has been my mission in the US- when I started in 1988 there was no recognition of bitterants as a poison prevention strategy. Now, Bitrex is a safety additive in nearly every bottle of antifreeze, nail polish remover, furniture and metal polish, many household cleaners, detergents and pesticides.
Your book has helped me help companies recognize the marketing value of ingredient disclosure.“
Mitch Tracy, CEO of Bitrex®
“This book explains how and why putting the brand of an ingredient on the outside of a product increases its appeal to the customer. The authors give managers and business leaders important insights into how this innovative marketing concept works and how to implement it”
John A. Quelch, Lincoln Filene Professor of Business Administration at Harvard Business School, Cambridge, MA and author of “Greater Good: How Good Marketing Makes for Better Democracy”
“A fascinating, eye-opening perspective on the marketing and positioning of new, complex products, and a most valuable, wonderfully practical and readable book and guide for business leaders wanting to communicate the qualities of their products and components.”
Rolf D. Cremer, Dean and Vice President CEIBS, China Europe International Business School, Shanghai, China
About the Authors
Forewords and Further Information
CDs and DVDs, water bottles, sports eyewear, binoculars, helmets, storage boxes for food, car headlights, automotive roof glazing – these are just some of the everyday products that benefit from the unique properties of Makrolon®, a plastic manufactured by Bayer MaterialScience AG. To draw the attention of trade and consumers to this high-tech material, many of the consumer goods made from it now bear the quality mark “Made of Makrolon®”, which has transformed Makrolon® into a world-famous brand.
“Ingredient Branding” is the technical term for this strategy of taking the product – originally a business-to-business product – to the consumer marketplace, where it gains global recognition. Bayer MaterialScience is exploiting the benefits of a brand strategy to make its high-tech polycarbonate Makrolon® stand out from its competitors. This cooperation between Bayer and selected Makrolon® processing companies began in 2000. Through this arrangement, the message conveyed to the consumer is that not only the product manufacturer is committing himself to the quality of the product but also the supplier of the most important constituent – the material used to make it.
Since its invention in 1953, this plastic has been regarded as a versatile material with many positive properties. With its customizing ability for transparency/opacity, impact strength, temperature-independent dimensional stability, exceptional flow properties and light weight, the application potential for Makrolon® is virtually unlimited. As far as brand strategy is concerned, it is an enormous benefit to Bayer MaterialScience that the plastics industry has known and worked with Makrolon® for several decades. A new aspect, however, is the targeting of other groups. The aim is that not only product designers, buyers and engineers should be made familiar with the material but also the tradesmen and consumers. Since plastic is a key component of the consumer product and bears considerable responsibility for its function, but cannot be directly “seen”, Ingredient Branding makes an important contribution.
Some examples of consumer products that bear the quality mark “Made of Makrolon®”:
– Our Latin American partner Videolar, uses this seal of quality to show which plastic guarantees optimum storage quality and data security for its writable CD-Rs and DVD-Rs.
– Sheffield Plastics Inc., a Bayer MaterialScience Company, produces Makrolon® polycarbonate sheet products for a variety of markets, including architectural, security, specialty vehicle glazing and sign applications. Manufactured to offer attractive protection in areas subject to high traffic, vandalism or burglary, and tough enough to withstand severe weather, Makrolon® sheet products provide unsurpassed quality and performance.
– The UVEX Sports GmbH & Co. KG, headquartered in Fuerth, Germany and its worldwide agencies extending from the United States to Japan utilize the benefits of Makrolon® for their branded cycling, skiing and sports goggles, UVEX Supravision® visors in motorcycle helmets and Microshell outer shells in cycle helmets. This form of Ingredient Branding is currently unique in the sporting goods segment.
– Steiner Optik GmbH in Bayreuth uses Makrolon® to manufacture the body of its high-quality binoculars and thus give the optical system the necessary protection.
– The German manufacturers of the Alurunner® high-tech sled and the American manufacturers of the Makboard transparent snowboard both draw attention to aspects of the product experience that are enhanced by Makrolon® plastic – the seat on the Alurunner® and the basic material in the case of the Makboard.
– The Asian company Zhongshan C&C Luggage Manufacturing Co., Ltd. uses the “made of Makrolon®” tag as a marketing tool for its Crown hardtop cases, as does the Japanese company Matsuzaki Industry Co. Ltd. for its Maruem brand.
– Last but not least, Makrolon® has in recent years also made a name for itself in the field of designer lamps. The Italian company Luceplan is another marketing partner that uses Makrolon® to manufacture and promote its classic Constanzina range of lampshades.
All these established partnerships that are part of the strategic marketing of Bayer MaterialScience’s high-tech polycarbonate promote the Makrolon® brand. As a result, the end user can better identify with the product. This book gives managers and future decision-makers useful information on this interesting marketing tool that helps consumers to look not only at the product itself but also at the materials used in its manufacturing when making a purchasing decision.
Bayer Material Science
Business Unit Polycarbonates
Global Branding Makrolon®
During my 30-year career, which includes being a consultant for McKinsey & Company and senior executive at IBM, I’ve thought long and hard about how to strengthen various businesses. However, it has only been in recent years, as CEO of Microban, that I have fully appreciated the amazing power of Ingredient Branding. So, when I learned that Philip Kotler and Waldemar Pfoertsch were writing a book focused on this subject, I was only too happy to help. As far as I know, this is the only comprehensive, scholarly, yet very practical book on Ingredient Branding.
I’ve found that business leaders are constantly searching for new, important ways to strengthen their businesses. Most leaders are looking to increase market share, raise prices, broaden distribution or improve their product mix – e.g., sell more of their premium products. They deploy many “conventional strategies”, such as creating greater awareness through advertising or offering temporary price reductions. Ingredient Branding is not a substitute for these “tried and true” strategies. Rather, it’s another strategy to add to the arsenal. It’s like adding another arrow to a quiver. And the business leader with more arrows – more firepower, is more likely to win in the marketplace.
Ingredient Branding: Making the Invisible Visible is on the mark. This book provides helpful frameworks to understand Ingredient Branding, when it should be used, and how to get the most value from it. It also provides examples and case studies that bring the conceptual frameworks to life. It is both scholarly, and yet almost a “how to” guide for people with a charter to make things happen.
Of course, leveraging an Ingredient Brand is not going to be the right strategy for every business all the time. However, it’s constantly surprising to me how often I speak with sharp business leaders, and they haven’t even considered this important strategy. If nothing else, this book will enhance your knowledge of Ingredient Branding and make you a better well-rounded business leader. And of course, it may also lead you to drive stronger business performance in the marketplace through Ingredient Branding.
David J. Meyers
President and CEO
Microban International, Ltd.
Huntersville, NC, USA
My career has taken me in a few directions, but I could never have predicted that I would be actively involved in something, which Philip Kotler and Waldemar Pfoertsch refer to as “Ingredient Branding”. However, this is exactly what we have been doing here at Macfarlan Smith for almost thirty years. The preparation of this foreword has also made me realize what an interesting journey our product Bitrex® has taken me on personally. Having started my career as a chemical analyst, I had responsibility for overseeing both sales and marketing of Bitrex® globally. The challenge, as encountered by my predecessors, was how to take a product ingredient, which has no effect on the performance of the product, and make it the reason for the consumer to purchase the product. Simply put, I have relied on the fundamentals of Ingredient Branding.
As the most bitter substance ever discovered, our key selling points of Bitrex® are safety, innovation and credibility. Bitrex® has a wide and varying use. Its primary use is to render a product unfit for human consumption. This started with the use of Bitrex® in denaturing industrial alcohol, and has lead to preventing children from ingesting a range of household chemicals, and deterring dogs from eating common garden pesticides. It is in applications such as these latter two markets in which we see Bitrex® gain its full potential as an Ingredient Brand.
My experience of product category managers is that they are constantly looking for new means of selling their products to the consumer. It is our job to educate them that Bitrex® is an option. Once informed, these managers can confidently develop new marketing strategies, not only connecting their products closer to the customer, but also enhancing their own personal knowledge of a unique marketing tool. When a Bitrex® partner utilises the Bitrex® brand, they have a number of options to communicate this to end consumers. Done efficiently, this message can have many positive outcomes for our partners such as innovation, product improvement, market leadership, and caring for the customer. All of which reflect well on our partners. Crucially, we ensure that the message from Bitrex® inclusion is clear and easily understood by the consumer. I’m sure this is the same for most Ingredient Brands.
A fundamental part of our business model is to work with highly regarded experts in the field of safety. In addition, our dedicated technical service ensures our credibility, and of course, efficient use of Bitrex® in our partners’ products. We, as I’m certain is the case with other Ingredient Brands, face fierce competition. It is the ability to offer something more, something motivating and inspirational, which separates successful Ingredient Brands from cheaper generic imitators. This also ensures that Bitrex® continues to move forward as a brand.
To summarize, Ingredient Branding has been our line of business for a long time. Maybe only now are the strategies employed fully recognized as a unique marketing tool. This educational book will help readers to develop their personal marketing skills, and hopefully lead to the Ingredient Brands of the future.
Bitrex® Business Manager
Macfarlan Smith Limited
A Johnson Matthey Company
Edinburgh, Scotland, United Kingdom
该书由西北大学凯洛格管理学院美国庄臣国际营销学特聘教席教授菲利普?科特勒博士（Dr Philip Kotler）和中欧工商学院营销学副教授弗沃德博士（Dr Waldemar Pfoertsch）共同撰写。 在调查了一百多个成分品牌之后，作者以横跨四个产业领域的分析以及九个详细个案研究，阐述了这项富有生命力的营销新方式。作者立足于英特尔、戈尔特斯、杜比、利乐、禧玛诺、微霸、特富龙、施华洛世奇和碧萃等品牌的成功故事，预言成分品牌战略将越来越多地为供应商所运用。
哈佛商学院（Harvard Business School, Cambridge）管理学教授约翰?奎尔奇（John A Quelch）如此评价本书：“突显产品中某项成分，能够提高产品对于消费者的吸引力，本书解释了这一现象的运作过程及其背后的原因，以使经营者和企业领袖认识到这一全新的营销概念，并加以实施。”奎尔奇教授著有《优秀的市场造就更好的民主国家》（How Good Marketing Makes for Better Democracy）一书。
中欧国际工商学院副院长兼教务长郭理默教授（Rolf D Cremer）也高度评价此书，认为它“以有趣的全新视角审视了复合产品的定位和营销，对于希望推介产品及其成分的企业领袖来说，是一部极具可读性和实际价值的参考书。”
品牌管理课程 B2B Brand Management.
Die Marke in der Marke: Bedeutung und Macht des Ingredient Branding
Marketing thrives on innovation and customer value. Companies that can combine the two are on the road to success. With Ingredient Branding suppliers and end product manufacturers have a new tool which gives them a real competitive edge. Intel’s ingredient branding-concept „Intel inside“ has shown the way. More than 90% of the market is the best evidence for the functioning of this approach. Ian Paterson, a member of the Board of Bayer MaterialScience AG formulated: „The consumer gets the message that not only the manufacturer of the item stands for the quality of the final product, but also the supplier of the main ingredient.“ In this book, other examples are presented, which give readers ideas on how they can make their mark in the brand’s success.